Most people think that pensions are a thing of the past. True, companies are no longer offering this retirement benefit but that doesn’t mean that you have to miss out on the benefits of having a pension.
A pension, like social security, is a guaranteed stream of income until the day that you die. Social security is the most common form of guaranteed income that the average retiree relies on. This is because with a guaranteed paycheck coming in, they know what to expect.
What day of the week do you spend the most money? You probably said Saturday, well in retirement every day is Saturday and you’re going to spend more money than you ever thought you would.
Keep in mind, deductions disappear over time and now you have to turn your assets into income. Do you know how to do this in the most efficient way that accounts for taxes and market performance? Remember, income pays for your life style, not assets and there are some easier ways to get income that you can count on.
The American College has identified 18 risks that you’ll face in retirement so the more risks that you can mitigate the better off your retirement will be. The difference between a successful retirement and a not so successful one is the management of these risks. Of the 18 risks there is one single greatest risk, it’s actually a multiplier of the other 17 risks. LONGEVITY RISK.
Simply put, this is the risk that you will run out of money in retirement. This can be due to a number of things but because of this, many retirees live a “Just in Case” retirement. This means that you will live off of only the minimum that you need just in case something happens, whenever this time never comes, you would have died without ever using your money on yourself. Don’t live this retirement.
Instead, create your own private pension in the form of an annuity. An annuity is designed for four purposes:
- P: Principal Protection( Guaranteed to get out what you put in)
- I: Income (Now and/or Later)
- L: Legacy
- L: Long-Term Care
These private pensions can be used to maximize your income by over 250% if used wisely. You can set up your payments to start immediately or in a later date in time. These payments will begin paying to you for as long as you need, your guaranteed lifetime paychecks.
This gives you the ability to lock in certain lifestyle choices i.e., bills covered, travel, country club membership, etc. If you have two annuities, one could be used to cover your basic living expenses and another could be used to pay for your golf membership. Now, no matter what happens in the economy you can guarantee that your bills are paid and you can still go play golf.
Annuities are powerful tools if used correctly so schedule a time with is today to learn if an annuity is right for you.
If you are between the ages of 35-55 you can protect your retirement from taxes. We are in a historically low tax environment, and today’s low tax environment creates tomorrow’s high taxes. Don’t let your 401(k) and IRAs become low hanging fruit for Uncle Sam. Learn how to retire in a Zero Percent Tax bracket.